The cam followers or "lifters" are hydraulically self adjusting, consisting of steel cylinders with a spring loaded top face. Oil's pumped in through a small hole in the side & the lifters pump up, to take up the slack below the pushrods, eliminating the need to set tappet clearances. Great -when they work. Our collective best guess was that one wasn't pumping up, creating a gap for the pushrod to bounce up & down in.
Very careful examination seemed to prove us right. One of the lifters was badly worn & had several hairline cracks in the base. Presumably the oil was being pumped in, but escaping & not holding pressure.
Fortunately I bought a 2nd engine for spares last year, so as Dr Kev wisely waved us goodbye & headed for home, I nipped across town to our lock-up garage & pulled a couple of lifters from the spare motor. Meanwhile Chris collected his new valley gasket from home. I didn't have any gasket sealant, so we put everything back together dry. By mid evening we were ready to fire the motor up again. Vrooom ....clack, clack, clack. Bugger.
We left it to idle for a while & gradually the noise eased off. Aha! Presumably it took a little while for the new lifter to fill with oil.
After 5 minutes we had an acceptably quiet engine again -but we've gained a new problem. Now it's pumping clouds of grey smoke out of the exhaust. Poo. So now it's running fine, but filling the yard with smoke. After much discussion, we've decided it's water, rather than oil. Which means either there's a crack in the carb inlet manifold as the engine coolant's circulated through it, or water's getting under the valley gasket & crossing between the inlet ports & waterways. After Mr Loon took it for a quick drive up & down the yard, we shut it off before we damaged the bores.
So. We seem to have fixed the original problem, but created another. I'm out for the day tomorrow, but will return on Monday with a tube of blue Hylomar sealant & will strip it down, seal the gasket & put it back together. Fingers crossed it'll work. Oh & Loon says the speedo works now!
Chris, torqueing the rockers down before we fired it up. He re-posted this photo on FaceBook & got labelled a gay pin-up boy.